Having regard to the decision to apply Article
29 § 3 of the Convention and examine the admissibility and merits of
the case together.

Having deliberated, decides as follows:

THE FACTS

The applicant, Mr Perka Carlsson, is a Swedish
national, who was born in 1954 and lives in Sköndal, Sweden. He is
represented before the Court by Mr B. Leidhammar, a lawyer practising
in Stockholm.

A. The circumstances of the case

The facts of the case, as submitted by the applicant,
may be summarised as follows.

1. The Audit report

In their tax returns for the tax assessment years
1993 and 1994, a substantial number of persons, including the applicant,
made deductions for capital losses, after having bought and sold interest
options (ränteoptioner), and for paid interest on a promissory note
loan (reverslån).
All transactions were made with the same opposite party, Nordisk Fondkommission AB (the Nordic Fund Commission, hereinafter
referred to as the “NF”) which had also granted the loans.

Because of the substantial number of persons
who had made deductions for capital losses following transactions with
the NF,
the Tax Authority (skattemyndigheten) of the County of Stockholm decided to make
an audit of the NF. However, due to the very complex and intricate nature of
the transactions and the lack of co-operation by the NF, the investigation proved difficult to carry out, for which
reason the Tax Authority hired an independent expert body to carry out
a part of the audit.

According to the findings of the audit, as set
forth in the Tax Authority's audit report (granskningspromemorian) on 21 June 1995, the transactions made
between the individuals and the NF had been based on an agreement entered into by the parties
beforehand who had followed a procedure set forth therein. The transactions
had included buying and selling specific interest options which the NF claimed
were adjusted to conditions on the market. However, the Tax Authority
found through the audit that the options had not been noted on the market
nor adjusted to the market conditions, since the market price of the
options had not been decisive for the determination of the price at
the time of selling. Instead, the price of the options had been fixed
in advance already in the agreement. Moreover, the size of the loss
during the first year and the subsequent recovery the following year
had also been decided beforehand. Thus, in fact, the parties had not
dealt with real options, as defined in the law.

As concerned the promissory note loan, the same
type of agreement had been followed. The first year, the individuals
had paid a very high interest on the loan and then, at the beginning
of the second year, they had paid the loan in advance, following which
a part of the interest was repaid. The audit report revealed that both
the cost of the interest paid the first year and the repayment of part
of the interest made the second year had been predetermined in the agreement.

The audit report concluded that the individuals
had been offered by the NF an agreement in which everything was predetermined and where
the purpose had been to obtain tax benefits. The idea had been that,
tax wise, the high interest on the loans paid the first year, and the
repayment the following year, should finance the capital losses of the
transactions with the options.

2. The tax assessment year 1993

On 23 November 1994, the Tax Authority sent a
preliminary consideration (övervägande) to the applicant, informing him that it was
considering disallowing the deduction for capital losses in the amount
of SEK 59,533, and the deduction for paid interest, SEK 116,667, on
the promissory note loan that hehad made in his tax return for the tax assessment year 1993.
Further, it was considering imposing tax surcharges (skattetillägg) amounting to 40% of the increased tax liability
on the latter sum. The applicant was requested to submit any comments
he might have by 12 December 1994.

On 28 December 1994, the Tax Authority decided
to follow its preliminary consideration. With regard to the imposition
of tax surcharges, it found that the applicant had submitted incorrect
information by failing to provide it with information about the true
conditions of the interest rates of the loan. Further, it considered
that no grounds for remission had been shown and that, due to the character
of the matter and the way in which it had been carried out, it could
not be assumed that any such grounds existed.

On 31 January 1995 the applicant appealed against
the decision, disputing the Tax Authority's findings. He maintained
that there were no grounds for changing his tax return or imposing tax
surcharges. On 6 November 1995, he submitted supplementary information
to the Tax Authority.

On 21 December 1995 the Tax Authority made the
obligatory re-assessment of its decision of 28 December 1994 but decided
not to change it. Following this, on the same day, it forwarded the
appeal to the County Administrative Court (länsrätten) in Stockholm.

3. The tax assessment year 1994

On 21 June 1995, the same day that the above-mentioned
audit report was finalised, the Tax Authority transmitted it to the
applicant and informed him of its intention to alter his tax assessment
for the year 1994 and to impose tax surcharges on him. On 30 November
1995 the Tax Authority sent a preliminary consideration to him and,
on 28 December 1995, it decided, on the basis of the findings of the
audit,
to decrease his income from capital gain by SEK 74,153 for capital losses
but, at the same time, to increase his income from capital gain by SEK
237,773 for non-deductible interest. It further imposed tax surcharges
amounting to 40% of the increased tax liability of the latter sum since
it considered that the applicant had submitted incorrect information
and that no grounds for remission existed.

On 28 March 1996 the applicant appealed against
the decision and requested that he be taxed in accordance with his tax
return and that the tax surcharges be removed. He further stated that
he would develop his grounds of appeal in a later submission.

However, the Tax Authority did not receive any
further communication from the applicant. On 18 February 1997, it made
its obligatory re-assessment of its original decision and decided not
to change it. It noted that, even though nothing had been heard from
the applicant, it considered it necessary to take a decision in order
not to prolong the process further. The appeal was then forwarded to
the County Administrative Court where it was joined to the applicant's
appeal for the previous tax assessment year.

4. The proceedings before the administrative
courts

The parties made further submissions before the
County Administrative Court. The applicant had requested that the court
hold an oral hearing in his case, but he withdrew this request since
an oral hearing was to be held in other similar cases.

In a partial judgment of 8 October 1999, the
court rejected the applicant's appeal concerning the question of deduction
for capital losses on the options for the tax assessment year 1993.

On 17 February 2000 the above-mentioned hearing
was held and, on 29 February 2000, the County Administrative Court rejected
the applicant's appeal.

With regard to the tax surcharges, the court
first considered that the imposition of tax surcharges did not violate
the Convention. It then found that the applicant had submitted incorrect
information and that there was reason to impose tax surcharges since
it was clear that hehad not furnished the Tax Authority with the conditions for
the promissory note loan and the interest rates. Therefore the Tax Authority
had not been able to examine whether the declared deductions for interest
were correct. It further found that no reasons for remission had been
shown.

On 4 May 2000 the applicant appealed to the Administrative
Court of Appeal (kammarrätten) in Stockholm. He maintained hisclaims, invoking and expanding the grounds he had presented
before the lower court. Inter alia, heclaimed that the imposition of tax surcharges violated the
presumption of innocence contained in Article 6 § 2 of the Convention
since the Tax Authority had failed to prove that he had given incorrect
information intentionally or by neglect.

On 22 March 2001, the Administrative Court of
Appeal, as the lower court, held an oral hearing in other similar cases
where several witnesses were heard at the taxpayers' request.

In a judgment of 18 June 2001, the court rejected
the applicant's appeal on the same grounds as the County Administrative
Court, and stated that, although the imposition of tax surcharges fell
within the ambit of Article 6 of the Convention, it did not violate
the presumption of innocence contained therein.

On 3 September 2001 the applicant appealed to
the Supreme Administrative Court (Regeringsrätten) and requested a respite until 31 October 2001
to supplement his submissions. It is not clear, however, whether he
did so.

On 21 May 2002 the Supreme Administrative Court
refused leave to appeal.

B. Relevant domestic law

Taxpayers submit yearly tax returns to the local
tax authorities. To secure that timely, sufficient and correct information
is provided, the tax authorities may, under certain circumstances, impose
special charges on the taxpayer in the form of tax surcharges.

The rules on tax surcharges relevant to the present
case were laid down in the Taxation Act (Taxeringslagen, 1990:324). According to Chapter 5, section
1 of the Act, a tax surcharge is imposed on the taxpayer if he or she,
in a tax return or in any other written statement, has submitted information
of relevance to the tax assessment which is found to be incorrect. It
is not only express statements that may lead to the imposition of a
surcharge; concealment, in whole or in part, of relevant facts may also
be regarded as incorrect information. However, incorrect claims are
not penalised; if the taxpayer has given a clear account of the factual
circumstances but has made an incorrect evaluation of the legal consequences
thereof, no surcharge is imposed. The burden of proving that the information
is incorrect lies with the tax authority. The surcharge amounts to 40%
of the income tax which the tax authority would have failed to levy
if it had accepted the incorrect information.

In certain circumstances, a tax surcharge will
be remitted. Thus, Chapter 5, section 6, of the Act states that taxpayers
will not have to pay a surcharge if their failure to submit correct
information or to file a tax return is considered excusable owing to
their age, illness, lack of experience or comparable circumstances.
The surcharge should also be remitted where the failure appears excusable
by reason of the nature of the information in question or other special
circumstances, or where it would be manifestly unreasonable to impose
a surcharge.

Chapter 5, section 7, of the Act stipulates that,
if the facts of the case so require, the tax authorities must have regard
to the provisions on remission, even in the absence of a specific claim
to that effect by the taxpayer. In principle, however, it is up to the
taxpayer to show due cause for the remission of a surcharge.

COMPLAINTS

The applicant complained that his rights under
Article 6 § 2 of the Convention had been violated when the national
authorities imposed tax surcharges on him without showing that hehad failed
to submit the necessary information intentionally or by neglect. He
also claimed that the length of the two proceedings had been excessive;
the proceedings relating to the tax assessment year 1993 lasting some
seven years and six months, and those relating to the tax assessment
year 1994 lasting six years and eleven months.

THE LAW

1. The applicant complained that the presumption
of innocence contained in Article 6 had been violated by the Tax Authority
and the national courts when they imposed tax surcharges on him. He
alleged that they had had preconceived ideas that no reasons for remission
existed and that they had failed to carry out a nuanced and not too
restrictive assessment of whether grounds for remission existed. Moreover,
he claimed that it had been disproportionate to impose tax surcharges
having regard to the complexity of the tax matters at issue, the length
of the proceedings and the size of the tax surcharges imposed. Article
6 § 2 of the Convention provides as follows:

“Everyone charged with a criminal offence shall
be presumed innocent until proved guilty according to law.”

The Court recalls that, although tax surcharges
cannot be said to belong to criminal law under the Swedish legal system,
it has found in several judgments concerning Sweden (see, in particular, Janosevic v.
Sweden, no. 34619/97, 23 July 2002, §§ 64-71, ECHR 2002-VII,
and Västberga
Taxi Aktiebolag and Vulic v. Sweden, no. 36985/97, 23 July 2002,
§§ 75-82) that the imposition of such measures involves the determination
of a “criminal charge” within the meaning of Article 6 of the Convention.
However, in the two above mentioned judgments, the Court considered
that the presumptions applied in Swedish law with regard to tax surcharges
had been confined within reasonable limits and that the presumption
of innocence contained in Article 6 § 2 of the Convention therefore
had not been breached (ibid., §§ 96-104 and §§ 108-116, respectively).
This conclusion was reached having particular regard to the fact that
the relevant rules on tax surcharges provided certain means of defence
based on subjective elements, and that an efficient system of taxation
was important to the State's financial interests.

In the present case, the Tax Authority, the County
Administrative Court and Administrative Court of Appeal all considered
the grounds for remission of the tax surcharges but found that no such
grounds were applicable. Moreover, both the Country Administrative Court
and the Administrative Court of Appeal examined the applicant's objection
that the imposition of the tax surcharges violated his rights under
Article 6 § 2 of the Convention. However, both instances rejected the
objection, finding that, although Article 6 was applicable, the imposition
of tax surcharges did not violate the presumption of innocence since
the courts had made an assessment of whether there were any grounds
for remission.

Moreover, the Court notes that, unlike the applications
of Janosevic
and Västberga
Taxi Aktiebolag and Vulic, the present case did not involve any
enforcement measures to ensure the payment of the tax surcharges.

In these circumstances, and having regard to
the Court's case-law referred to above and the fact that the national
courts made an individual assessment in the applicant's case, the Court
finds that the applicant's right to be presumed innocent has not been
violated in the present case.

It follows that this complaint must be rejected
as being manifestly ill-founded pursuant to Article 35 §§ 3 and 4
of the Convention.

2. The applicant also claimed that the
national proceedings, for both tax assessment years 1993 and 1994, had
not been finalised within a reasonable time, in contravention of Article
6 § 1 of the Convention, which, in relevant parts, reads:

“In the determination of his civil rights and
any criminal charge against him, everyone is entitled to a ... hearing
within a reasonable time by [a] ... tribunal.”

The Court considers that it cannot, on the basis
of the case file, determine the admissibility of the complaint concerning
the length of the proceedings for the tax assessment year 1993 and that
it is therefore necessary, in accordance with Rule 54 § 2 (b) of the
Rules of Court, to give notice of this part of the application to the
respondent Government.

As concerns the length of the proceedings for
the tax assessment year 1994, the Court first finds that the period
to be taken into consideration commenced on 21 June 1995 when the Tax
Authority communicated its audit report to the applicant and he was
informed of its intention to amend histax assessment and to impose tax surcharges. It ended on 21
May
2002 when the Supreme Administrative Court refused leave to appeal.
Thus the overall duration of these proceedings, which involved one administrative
and three judicial levels, was six years and eleven months.

The Court reiterates that the reasonableness
of the length of the proceedings must be assessed in the light of the
circumstances of the case and with reference to the criteria established
by the Court's case-law, particularly the complexity of the case, the
conduct of the applicant and of the relevant authorities and what was
at stake for the applicant in the dispute (see, among other authorities, Humen v. Poland
[GC], no. 26614/95, § 60, 15 October 1999).

In the present case, the Court finds that the
subject matter was of a complex nature, which is reflected in the fact
that part of the Tax Authority's audit had to be carried out by an independent
expert body. Moreover, it concerned a rather sophisticated financial
set-up involving a large group of people (apparently 54 persons), which
undoubtedly made the Tax Authority's investigation more difficult. However,
once the audit was finalised, the authority and the national courts
could consider the cases together, which they in fact did. Both the
County Administrative Court and Administrative Court of Appeal held
a joint oral hearing for a few of the cases, but which related to all
the cases. In addition, most of the individuals concerned were represented
by the same lawyer who made almost identical submissions for all his
clients.

Turning to the conduct of the applicant and the
national authorities, the Court notes that the case was pending approximately
one year and eight months before the Tax Authority. However, in his
appeal of 28 March 1996 against the Tax Authority's decision of 28 December
1995, the applicant had stated that he would develop his grounds of
appeal in a later submission. He never did so. Thus the Tax Authority,
in order not to prolong the process any further, made its obligatory
re-assessment on 18 February 1997 and then forwarded the appeal to the
County Administrative Court. The Court finds, therefore, that a delay
of about one year before the Tax Authority must be attributed to the
applicant alone, not the Tax Authority. In the Court's view, the remaining
eight month period cannot be considered excessive, as the Tax Authority
during this time drew up its preliminary consideration which was sent
to the applicant for comment. It then took its decision and made an
obligatory re-assessment of its decision before sending the applicant's
appeal to the County Administrative Court.

Concerning the proceedings before the County
Administrative Court, these lasted just over three years, during which
time the parties made a number of submissions to the court. On 8 October
1999 the court gave a partial judgment concerning one of the contentious
tax questions. It then held an oral hearing on 17 February 2000 and
delivered its final judgment two weeks later. Having regard to the very
large number of parties involved in the proceedings and the complex
nature of the subject matter, the first instance court cannot be criticised
for the fact that the proceedings took three years, even if there were
a few short periods of inactivity.

In contrast, the proceedings lasted only two
years in total before the two appellate courts (the Administrative Court
of Appeal and the Supreme Administrative Court), during which time the
Administrative Court of Appeal held an oral hearing.

The Court is aware that the proceedings concerned
reasonable amounts of money for the applicant. However, he has not claimed
that this has had serious financial or other consequences for him.

In sum, although the impugned proceedings took
six years and eleven months to be completed, they involved no less than
one administrative and three judicial levels and a substantial number
of persons. Moreover, the subject matter was of a complex nature and
the delay has not entailed serious consequences for the applicant. In
these circumstances, the Court finds that the procedure, seen as a whole,
did not exceed a reasonable time.

It follows that this part of the application
is manifestly ill-founded within the meaning of Article 35 § 3 of the
Convention and must be rejected in accordance with Article 35 § 4.

For these reasons, the Court unanimously

Decides to adjournthe examination of the applicant's complaint concerning the
length of the proceedings for the tax assessment year 1993;